We are buying a new build vacation rental home. We’ve paid the deposit and the home will be ready in early March. I assume the mortgage interest is deductible (and not the full mortgage payment) in which case I would expect the yield to be circa $1k pm after all deductions. YOU ARE CORRECT, only the […]
Category: LLC
Distributions from Sub S – Income?
This example shows why distributions are not income. DISTRIBUTIONS ARE NOT INCOME YOU ARE TAXED ON THE PROFITS OF THE COMPANY WHETHER YOU TAKE A DISTRIBUION OR NOT. Example 1: Let’s say you alone start a new company and you put in $10k. The first year the company makes a profit of $100k. That makes […]
Partnership Basis when contributed property is sold
Example……. Partner 1 contributed cash Partner 2 contributed stuff Both count toward their basis in the partnership. The stuff is valued at the Fair Market Value. That being said… Partner 2 has BASIS in the stuff contributed to the partnership BUT that basis may be less than the Fair Market Value. Nothing taxable yet. Example: You and […]
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HSA – Random IMPORTANT info
Reimbursements may include Health Insurance while collecting unemployment. Disbursements not used for qualified medical expenses are taxable AND PENALIZED 20% Cannot be enrolled in Medicare Cannot be claimed as a dependent on someone else’s tax return. Your plan cannot allow for prescription drug coverage before deductible is met. […]
Can Unused Rental Losses be Deducted in a Bankruptcy?
Can you deduct unused rental losses in a bankruptcy? LAW: Under IRC § 469(g), current and carryforward passive activity losses are fully deductible in the year of an entire disposition in a fully taxable transaction to an unrelated party. A qualifying disposition may create a Net Operating Loss (NOL) which can be carried back. See IRC § 172 Once […]
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IRS PAYMENT OPTIONS-ELECTRONIC
Click here for IRS Electronic Payment Options (goes directly to IRS website) […]
2013 Sub S Corp potential new form
2013 Sub Chapter S corporations owned by an estate, trust or disregarded entity (i.e. sole member LLC) must attach Schedule B-1. The new Form B-1 lists the name and tax ID of the shareholder. This helps IRS monitor tax cheats and check for Sub S potential terminations due to ineligible ownership. […]
2014 Estate & Gift Tax Exemption
2014 Estate & Gift Tax Exemption is based on $5,340,000. 2013 amount was $5,250,000. […]
2013 HSA Contribution Limits
2013 HSA (Heath Savings Account) Contribution Limits Self only plan Family plan Under age 55 $3,250 $6,450 Age 55 or over $4,250 $7,450 Age 65 or over (1) n/a n/a (1 (1) This does not mean you cannot contribute during the year. The calculation is done on a monthly basis. You can contribute until you […]
2013 Gift Basket – special tax court case
There is a recent tax court case that applies to gift baskets. For a number of years there has been something called the Production Activities Deduction (PAD). It generally applies to MANUFACTURING. This tax court case may open a deduction for flower shops and other companies that assemble gift baskets. If your bottom line income […]